When producing goods and services along a PPF, tradeoffs exist because
A) buyers and sellers often must negotiate prices.
B) not all production is efficient.
C) human wants and needs are limited at a particular point in time.
D) society has only a limited amount of productive resources.

Question

Quizplus · Accepted Answer

The PPF demonstrates the maximum amount of goods and services that can be produced with a given set of resources. Therefore, producing more of one good or service necessarily means sacrificing resources that could be used for other goods or services. This represents a tradeoff, and it is driven by the fact that society has only a limited amount of productive resources (such as labor, capital, and natural resources) available at any given time. Choices A, B, and C may also impact the production possibilities of an economy, but they do not represent the underlying reason for the tradeoffs that exist along the PPF.

When Producing Goods and Services Along a PPF, Tradeoffs Exist